Can this be done?

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    Can this be done?

    Hi

    I'd like to buy a property for my son? It would be financed with a 25% deposit and the rest on mortgage. At the moment he is only 14 so I don't think he can own a property until he is 18.

    If it is possible, how would I declare the rental income, pay the taxes etc?

    Also, would this cause any tax issues for my son later on, such as CGT or gifts?

    Many thanks

    #2
    You are correct - a minor cannot own property. You would be a Trustee. Any CGT on disposal would be his responsibility. Not sure if you need a Court Order to sell a minor's property?

    Also, any rental profit would be taxable on you until age 18.

    It would be a PET for IHT.

    Comment


      #3
      Thanks King-Maker.

      If the property became my son's main home (after he deserts me) - I guess this would solve any CGT issues?

      Also, sorry, what is PET?

      Comment


        #4
        Yes, if your son made the property his home, this could mitigate/extinguish the CGT liability depending on how long he resided there.

        Have you read HMRC's Help Sheet HS283 on the subject?

        http://www.hmrc.gov.uk/helpsheets/hs283.pdf

        A PET is a Potentially Exempt Transfer.

        Comment


          #5
          Many thanks, I'll have a read.

          Comment


            #6
            I was wondering how can a minor of 14 years qualify for a 75% mortgage ?

            Comment


              #7
              I was rather hoping it would be me (his mother) taking out the mortgage - I'd be paying all the taxes due and when my son is 18, he would hopefully be able to take on his own mortgage.

              Comment

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